Bull whip effect 3

Three such models can be identified the information

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Unformatted text preview: m architecture in which information is shared among supply chain partners. Three such models can be identified - the Information Transfer Model, the Third-Party Model and the Information Hub Model (see Figure 3). Figure 3: Three Models of Information Sharing 3.1. Information Transfer Model In this model a partner transfers information to the other who maintains the database for decision making. This is a natural evolution from the EDI-based transactional model. While EDI was originally designed to be a means to process ‘ ransactions,’ it has been extended to facilitate sharing of some information like POS and t on-hand inventory ([25], p.78). The model is exemplified by the examples of UPSMicroAge, SEJ, VMI and QF contracts. In VMI, the retailer sends sales and inventory information to the vendor, who replenishes the buyer’ inventory using the information s received. QF contracts typically require that the buyer sends his forecasts to the vendor, so that she can prepare for the coming weeks’ orders. In the UPS-MicroAge relationship, MicroAge transfers its orders data to UPS, who plans and executes deliveries. Likewise, SEJ franchisees transfer sales and customer information to SEJ headquarters which analyzes and summarizes the findings. 10 Supply chain partners may use EDI for information sharing after agreeing on an EDI standard. They can use EDI through third-party VAN services like GEIS, Sterling and Promenos. While EDI is a well-established process in the business world, it has several drawbacks. First, there are multiple industry-specific standards (e.g., Ordernet for the pharmaceutical industry), the cross-industry standard ANSI X12, and the international standard EDIFACT. A company with business interests in multiple industries has to face a problem of dealing with multiple standards. Second, since EDI is designed for all companies in the one-fits-all spirit, it may not exactly meet the special needs of a supply chain. Third, EDI is designed primarily for transaction processing, especially around purchase ord...
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